Wednesday, 30 August 2017

What’s next? – USDJPY 30.08.17

The dollar/yen was up 0.02 percent as of 04:55 GMT on Wednesday to trade at 109.76, as the greenback rebounded from a 2-½-year low following a meeting of the UN Security Council.

The 15-member UNSC unanimously condemned Pyongyang's launch of a ballistic missile over Japan on Tuesday, calling it an “outrageous” threat to the regional peace.

The organism also demanded North Korean authorities to immediately halt missile launches and put a stop to its nuclear weapons programme.

As the UNSC did not mention any further sanctions or specific measures to respond to the latest missile launch, geopolitical concerns eased among investors.

The US dollar index, which tracks the greenback against six major rivals, was trading at 92.25 by the time of this writing, adding 0.07 percent.

The yen performed very well yesterday, benefiting from strong safe-haven demand as market participants looked for shelter against political uncertainty.

The pair also found support at the data front, where the Consumer Confidence Index for August moved to 122.9, outperforming expectations for a drawdown.

Ahead in the day, traders will be looking at ADP nonfarm employment figures and a revision of the second-quarter GDP by 12:15 GMT and 12:30 GMT respectively.

As we’ve mentioned not once, this pair is particularly affected by risk on/ risk off mood, making it a very unstable instrument at the current time, with political factors playing big both inside and outside the United States and the Korean peninsula.

The pair is likely to remain calm until the release of official employment data on Friday, but ADP’s report could already set the tone for market players.